September 14, 2018 Opinion piece
With food prices on the rise and consumers tightening their belts, Britain’s supermarkets are scratching their heads for ways to boost sales.
But they shouldn’t worry too much. Consumers will always be willing to spend when you give them what they really want. For supermarkets, that’s increasingly local, authentic produce. As we found in our research, buying British is back in vogue. In fact, Waitrose found 80% of us actively consider how and where our food is sourced when shopping. Three-fifths of shoppers say place of origin is at least as important to them as other factors such as quality and price, while 55% of UK consumers say they prefer buying British brands to support local business. How are supermarkets capitalising on our desire to buy British? And how is it impacting their sales?
Every little helps
Tesco came top in our research. The supermarket giant granted the most space on their shelves to small British suppliers. We found Tesco provided 28% of the total opportunities to our members – almost double the nearest rival.
Since then, Tesco has stepped up their buying British campaign. As I wrote in my last post, small British brewers are thriving. Consumers are thirsty for authentic drinks with local provenance. We saw the number of craft drinks producers joining GS1 UK rise by 40% rise in 2016. Brewdog, the poster boy for the sector, is now valued at £1 billion. Tesco have looked to capitalise on this trend by championing British beverages as part of ‘Project Reset’ – the supermarket’s new strategy to take on the discounters. This involves increasing their range of craft beers from just two, up to around 30 varieties after successful trials at their smaller Tesco Express branches.
With the purchase of wholesaler, Bookers, which supplies a string of restaurants, including Carluccios, Rick Stein and Loch Fyne, we hope they’re going to help push authentic drinks to diners as well as shoppers.
The Waitrose Way
In our research, we also found Waitrose excelled in offering opportunities to small British producers – despite their relatively small size. While only holding 5% of the market, they provided 18% of the total opportunities to small UK producers – an impressive effort. Waitrose have made backing British part of their DNA. They were the first supermarket to establish livestock producer groups which source meat directly from farms, providing an assured market which allows farmers to invest in their business. Waitrose now have over 30 of these groups.
All their fresh chicken, beef and pork (including sausages) bacon, duck and goose are British all year round. At the moment, Waitrose have over 2,500 local products from 600 local suppliers in their stores – well ahead of their rivals. But Waitrose haven’t made this decision out of a sense of charity – it’s a commercially astute move with local products regularly outselling the ‘big brands’. How have shoppers reacted to Waitrose backing British? A record of continuous growth in Waitrose’s market share for nine years shows they clearly like what they see on the shelves.
Morrisons Makes It
Meanwhile Morrisons have also stepped up their efforts in 2017. The Yorkshire supermarket has announced plans to recruit more than 200 new suppliers across England, Scotland and Wales over the next year. They plan to invite food makers to compete for their place at a series of regional events. Morrisons say that more than 500 small producers have already registered to be considered for Morrisons stores via the events.
Live well for less
Sainsbury’s has put buying British at the heart of their ‘Living well for less values’. The supermarket say they’ve been committed to supporting UK farmers for more than 140 years. This has allowed Sainsbury’s to develop an impressive track record. Of the food products which can be grown in this country, Sainsbury’s source 90% from Britain. By buying from UK suppliers wherever they can, Sainsbury sell more than £6 billion worth of British food each year. While almost all their meat products are 100% British, its fruit sales where Sainsbury’s really excels. They sell 21 million British apples during the season – more than any other retailer. A third of all UK grown pears are also sold through Sainsbury’s. The supermarket argues that British countryside offers some of the best food in the world and have created their own ‘A ‘Taste of Britain’ logo to help market British produce in store ensuring they fill their customers’ appetite for home-grown produce.
From pretzel to pasty
As consumers demand local produce, even the German supermarkets are going British. While prices are rising, many consumers are turning to the Deutschland discounters to save money. But shoppers still prioritise products with clear origins and Lidl and Aldi have both reacted to this.
With its “Lidl Surprises” campaign, the supermarket is shifting perceptions on source of its produce, highlighting that 70% of its ‘core range’ for comes from British suppliers. A sterling effort for a price focused retailer. Lidl also signed up to the NFU’s Back British Charter. Waitrose, Morrisons, Aldi, The Co-operative and Marks and Spencer have already joined to back UK farming by strengthening their British product offering. As it has demonstrated its ‘local’ credentials, Lidl has boosted sales by 15% annually – more than any other supermarket.
Meanwhile, Aldi is making the case that it’s the most ‘British’ supermarket with just under 70% of all its produce coming from UK suppliers. In the UK, all of Aldi’s fresh everyday meat and poultry is from British, Red Tractor approved farms – a food standards scheme covering animal welfare, food safety, traceability and environmental protection. More than 40% of the fresh fruit and vegetables sold in Aldi is also from the UK – making them a market leader. British suppliers also appear to like working with them. Aldi have been voted the fairest supermarket to do business with in the Groceries Code Adjudicator (GCA) survey for three years in a row. Their move from pretzel to pasty is proving popular, with their sales growing by 14% annually.
Supermarket sweeps
Despite this drive, there’s still scope for supermarkets to do more in backing British produce. Research from Morrison’s has found that only 52% of the food eaten in the UK comes from local sources. Just 23% of the fruit and vegetable eaten in Britain is grown here, despite more than two thirds of shoppers agreeing that they would prefer to buy British where possible. According to the NFU, 86% of shoppers want to buy more British food, and every £1 invested in farming sees a return of £7.40 to the nation. Shoppers want more local produce and any supermarket which can provide it should reap healthy rewards.
In future, a shrewd strategy for any retailer looking to capitalise on consumer demand would be to add a buy British button when selling online – an idea discussed in a recent Westminster Hall debate. As online shopping becomes more popular, consumers who want to buy British are struggling to tell the source of food via their computers. By allowing product filters by country of origin, supermarkets could cash in on consumers taste for local products.